A cup with a handle? What on earth! Well it’s a charting pattern that supposedly indicates a continuation in the price of a stock (or any other instrument). So what the devil is it and how can we spot it? Well I wish there was a way of automatically spotting charting patterns such as the ‘Cup With Handle’ unfortunately I don’t think there is, currently. I know charting packages are improving and becoming more sophisticated on a daily basis so I’m sure before too long someone will write something that lets us scan them automatically but, until then we must find them manually. I don’t recommend looking through hundreds of charts to find these patterns so if I were you I wouldn’t even bother. It is worth knowing about them however, just in case one comes along out of the blue.
Take a look at the chart below. Recognise it?
Click image to see larger version. Image © SpreadCo
That’s right this is the current chart of premier foods. Over the last 18 months it has formed this very nice ‘Cup With Handle’ charting pattern which in theory means that the price should continue to rise. Notice I said ‘in theory’ and ‘should’. There is no such thing as a ‘sure thing’ in spread betting or any form of trading and there is no reason the price of premier foods could not continue to fall and never recover. Personally I like the look of the chart and so I have placed an buy order at 31 with a stop set below the recent dip in price at 28. I set it to Buy at £3 per point risking a total of £9 on the trade.
Not much else has been happening on my own spread betting front. I keep taking a look for new trades but so far nothing is coming and slapping me in the face so I’m playing the waiting game. Still spread bets can be like busses, you wait all day for one then two come along at once.
One last thing. A message to all the news letter subscribers. Hopefully you all received the news letter the other week. If you did not please check your spam folders. Not that what I sent you is spam but some filters may have thought it was such. If you did receive it great. Don’t forget the FTSE100 competition. So far only one person has entered. I understand most people will probably want to wait until nearer the closing date as you have a better chance of predicting the price. Entries close on 17th June at midnight so please be sure to enter by then otherwise you miss out on your chance to win. If you’re new to this blog and would like to enter the FTSE100 competition you need to subscribe first.
Until next time,
“May the markets be with you!”
Harry,
The Spread Betting Beginner
